Matt Cole recently joined the Karma School of Business podcast to talk private equity. The managing director at SBJ Capital spoke with host Sean Mooney about data-based decisions, how he got his start in PE and much more.
Here are some of the top takeaways from their conversation.
3 Takeaways from Matt
1. An Unconventional Route to PE
When asked about his path to the world of private equity, Cole said his journey was atypical.
“Mine is a bit circuitous,” he said. “I feel like it’s a more well-trodden path now and people have to take certain steps and so forth and that was definitely not the case for me.”
Starting in investment banking, Cole transitioned into operations, focusing on understanding the intricacies of making a company successful. His entry into private equity was more opportunistic, stemming from a relationship with a colleague.
He emphasized the importance of his diverse experiences: “It was the right combination of experience that I had to bring banking and operating set of experiences to PE.”
2. Value Creation with a Human Touch
Value creation is at the heart of SBJ Capital’s approach. Matt emphasizes the importance of working closely with family and founder-owned businesses and understanding their unique challenges and opportunities.
“These are family- and founder-owned businesses. They are not looking for someone with necessarily the shiny bulge bracket Wall Street resume to come in and tell them what the next opportunity is with their company,” Cole said. “I think it makes a big difference both in actual experience to be able to say we’ve walked in your shoes and in demeanor and approach for how we present ourselves to these companies and we call them partner companies for a reason.”
For SBJ, value creation revolves around professionalization and accelerating growth. Cole, however, is quick to point out that they approach this with respect and understanding.
“We’ll never come in pretending to know more about that business after a few-month diligence period than the people that have been there for extended periods of time or started that business themselves.”
3. Data and Decision-Making
Cole also stressed the importance of being prepared and adaptable. He highlighted the significance of data in driving business decisions and the potential of emerging technologies like AI.
“Part of the value creation story that I didn’t touch on as much before is the use of data and how are you using data? How are you implementing systems?”
Mooney added the importance of sharing information within a company, especially in founder-owned businesses.
“A lot of times the senior member of the teams don’t even know the revenue of the business or certainly don’t know the full P&L or the balance sheet or the income statement,” he said.
Cole’s transition from investment banking to operations and his adeptness at navigating the complex terrains of the business world make his episode well worth a listen.
When you’re done checking out his episode, head to the main BluWave podcast page for more conversations with business leaders.